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What is the future of e-commerce and Shopify? What apps will help users get there faster?

Posted By Seller Panda comments April 20, 2015

Here at SellerPanda, we think a lot about the future of e-commerce and Shopify. This might seem odd-why would a small company with such a narrow mission scope spend time and resources thinking about such a big question? How is it relevant to our monthly bottom line? Sure, Amazon, eBay and Shopify should dedicate a lot of efforts to these big questions, but why should a startup with a handful of employees do so?

Of course, we spend a lot of time speaking with customers about everyday problems they have here and now, and building apps to fix those problems. Our last app, Swatchify, and our next one, both solve very concrete and common problems. But there are good reasons to think big at the same time.

First of all, if we discover a current problem, odds are that someone else has as well. If it’s a big enough problem, there are or very shortly will be several apps to solve it. Then we have to figure out how to compete. It might be by creating some sort of lock-in, where switching to the competition is difficult, or it might be by coming out with features the competing apps don’t have. The problem with these approaches are that any feature we can build, the competition can replicate, and that it’s difficult to create lasting lock-in. That leaves price competition, which is a losing game-if you can sell an app for $10 per month, someone can do it for $9.99, until you get to the point where it’s free.

If, on the other hand, we can understand where the field as a whole is going, we can build apps that people don’t know they need, and where there is no competition. With an open playing field, we can build the apps however we want, and build a brand and expectation around them. Then the competition has to play catchup, while we’re building the next step. If we create apps based on an accurate vision of the future of e-commerce while our competitors create apps based on our last app, we can stay ahead without competing on price, especially if our apps work synergetically with each other.

More importantly, aside from making money, we very much believe that our work should be fun and meaningful. I think everybody reading this can feel where we’re coming from. The coolest thing about e-commerce in our eyes is that it lets people make a living doing something they like and care about. It’s a lot easier to get up in the morning and go to work when you have something you’re excited about waiting for you.

So what excites us? Well, frankly, giving the typical e-commerce business the tools to succeed, giving it the ability to do something that currently only the biggest companies like Amazon are working on. Realistically, the typical e-commerce business doesn’t have the budget or manpower to develop or run advanced solutions, and shouldn’t need to. Given the massive growth of e-commerce over the last few years and its projected massive growth over the next several years, if we create new of real value to the typical user, that value will be multiplied manifold as our app is downloaded and used by many users! That’s exciting-to know that you’ve made a positive change in the lives of lots of people, in a small but very real way!

Let’s take personalized pricing as an example of what I’m talking about. Basically, if you go to a market in most countries, a lot of time the price on the product is flexible. The merchant will adjust your price based on what he thinks you can and would be willing to pay. Here in Israel, if you go to Mahane Yehuda in Jerusalem or Shuk Hacarmel in Tel Aviv, and you’re a well-dressed professional, you’ll pay one price for your tomatoes. If you’re wearing paint-stained overalls, you’ll pay another. If you are obviously in a hurry, you’ll pay differently than if you’re shopping around. It’s not a huge difference, but it adds up over the life of a business.

Until recently, e-commerce operated like a big department store, where the sticker price was the final price, and everyone paid the same. But more and more often, big e-commerce businesses change their prices dynamically based on the profile of the customer looking. Don’t believe me? Search for airline tickets. Now search for tickets for the same flight with your browser in safe mode. You should see a measurable difference.

Now imagine if your typical Shopify store with a few dozen items for sale and a limited budget to spend on customer acquisition and sales had the same ability. If they could say, “if my visitor appears to be less well off, I want him to see a discounted price, and if he is wealthy, I want to charge him a little bit more.” Now, that would be cool. More customers on a tighter budget would buy something valuable they otherwise would have gone without. More customers who would be willing to buy an item for a bit more will pay that price without feeling taken advantage of. So everybody benefits-the customers get more valuable items, and the store sells more volume and leaves less money on the table. That’s awesome!

Right now, we’re exploring ways to make personalized pricing happen affordably for stores built on the Shopify platform. And that’s just one direction. There are about a dozen others we’ve thought of and which are in the hopper. And if you have your own ideas about the future of e-commerce and apps we should develop to make that future come to Shopify, please let us know-it gives us something to stay excited about!